Business, 22.02.2020 02:07 venancialee8805
On January 1, 2014, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2014, and mature January 1, 2019, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis.
(a) Prepare the journal entry at the date of the bond issuance. (Round answers to 0 decimal places, e. g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
January 1, 2014
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
(b) Prepare a schedule of interest expense and bond amortization for 2014?2016. (Round answers to 0 decimal places, e. g. 38,548.)
Schedule of Interest Expense and Bond Premium Amortization
Effective-Interest Method
Date
Cash
Paid
Interest
Expense
Premium
Amortized
Carrying
Amount of Bonds
1/1/14 $On January 1, 2014, Aumont Company sold 12% bonds $On January 1, 2014, Aumont Company sold 12% bonds $On January 1, 2014, Aumont Company sold 12% bonds $On January 1, 2014, Aumont Company sold 12% bonds
12/31/14 On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds
12/31/15 On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds
12/31/16 On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds On January 1, 2014, Aumont Company sold 12% bonds
(c) Prepare the journal entry to record the interest payment and the amortization for 2014. (Round answers to 0 decimal places, e. g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2014
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
(d) Prepare the journal entry to record the interest payment and the amortization for 2016. (Round answers to 0 decimal places, e. g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2016
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
On January 1, 2014, Aumont Company sold 12% bonds
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On January 1, 2014, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907,...
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